Launching a new Direct Selling Company (home party or MLM) and getting it off the ground can be a very complex and difficult process. Especially if you’re doing it on your own. Unlike many things, the world of Direct Sales is not something that you can just YouTube and find easy-to-follow tutorials on how to effectively build and grow a Direct Selling Company. There are many areas that must be considered, such as building your compensation plan (and keeping it legal), training your field, compliance, legal, your sales pitch, how to motivate your sales force, recruiting, retention, logistics, what software are you going to use, how do you keep a balanced budget, communication with your field, customer service, social marketing, and the list goes on and on. The best practices for each of these disciplines is truly unique for the world of direct selling. Much of what drives the peculiarities is the fact that your products will be demonstrated and sold by an army of independent field sales reps – who will make a decision each day whether or not to work their business and stay with your company.
Because of these complexities, only 20% of all direct selling startups are in business after one year. The other 80% have failed in their attempt to launch. However, what we have found is that if the entrepreneurs will take the time early to learn and follow proven best practices and processes for starting and running a direct selling company – that success rate is as high as 80% still in business and growing after one year.
We want more successes and less failures! We’re sure you do to! Failures are bad for the industry and leave thousands of independent sales reps’ dreams laying in the wake. Successes breed confidence and good will in the direct selling industry and help independent sales reps reach their dreams and aspirations. To increase success rates – YOUR success, we have brought together in one place, at one event, the industry’s leading experts in these different fields to educate you on Best Practices of Starting, Building, and Growing your Direct Selling Business.
The Direct Selling Symposium is a place of education, learning, and mentoring – and includes front-of-the-room instruction as well as individual coaching sessions. It is NOT a time when services are sold – in fact it is prohibited. Whether you’re an entrepreneur starting from scratch or leveraging your existing business by diversifying into the direct selling space – attending the Direct Selling Symposium will shave years off your learning curve, and dramatically increase the likelihood of success. We look forward to seeing you there!
Chargebacks and the direct selling industry often seem to go hand in hand, and at a minimum, they can lead to fines, higher rates and/or higher and longer term reserves which negatively impact profitability; or, if deemed excessive, they can lead to shut down of your merchant account. However, in many cases chargebacks are completely avoidable or at least manageable if you do a little show and tell.
Show Your Pricing
One tactic that is prevalent today is the large, brightly colored “Sign-Up” or “Buy Now” button and the tiny, light gray text at the bottom of the web page that outlines the pricing terms. While this approach may increase initial sales, (one school of thought is that many people use online bill pay and don’t regularly check their credit card bills anyway) be aware that it will likely also increase chargebacks because customers aren’t aware that they are entering a subscription agreement with ongoing monthly billing.
Once customers discover what has transpired, they feel deceived and are usually furious. While some may attempt to contact you first, others will immediately seek restitution via the credit card company.
One of the best ways to avoid chargebacks in this instance is to clearly display the total amount the customer will pay throughout the checkout process and if you have an option for a subscription service with automatic billing, be sure customers know which billing option they are choosing.
Show Your Terms
Any major terms and policies should be readily visible on your website. Such terms are typically a requirement of establishing a merchant account for a reason – the level of consumer complaints. Some common terms and policies that should be readily visible are:
– Shipping and handling fees
– Return policy (return window, restocking fees, product buy back, etc.)
– Order cancellation policy
– Exchange policy
Although it can take time to develop policies that make sense for your business model, and these policies may evolve with experience, a good way to minimize chargebacks is to have clear, readily accessible policies on your website. At the very least, they can help in your dispute of chargebacks when they occur.
If you receive repeated chargebacks for the same issue, you should review your policies and their visibility.
Tell Your Customers What’s Happening
If you don’t have the inventory you thought you would, if you couldn’t ship when you thought you could or even if a problem arises that you didn’t anticipate and have no set policy for, it’s important to talk to your customers. Few things anger customers more than unanswered phone calls and emails – no one likes to be ignored.
So, if there is a problem or misunderstanding, when customers contact you be sure to respond promptly (and instruct your distributors to do the same), and remember that it’s often not that a problem occurred, but how the business responds to the problem that ultimately defines the customer’s experience.
President & CEO, Metrics Global, Inc.
The following is part 7 in our 10-part series entitled “10 Steps Towards Launch!” by Terrel Transtrum, President/Founder of ServiceQuest. If you are thinking about starting a new direct selling company, contact us today!
The seventh of ten business segments that will bear heavily on the success of your new MLM business is TECHNOLOGY. MLM Software is one of the biggest challenges for all MLM startups. Select the right solution for your company by selecting the right technology partner. The following best practices will help to ensure success.
- Write the Requirements and Business Processes
- Conduct Due Diligence on the MLM Software Providers
- Develop your Plan for Network, Hardware and Helpdesk
- Work from a Technology Implementation Plan
- Be sure that there is Good “Chemistry” with Your MLM Technology Partner
- Document the Training and Reference Resources
- Create an Expansion and Growth Path for your MLM Software Plan
- Carefully plan for the Office Software Requirements
- Test all Aspects of Software and Technology to Assure Proper Integration
- Implement a Fully Functioning MLM Software and Enterprise System
Here are examples of descriptions that you might write for your MLM Launch Best Practice:
- Requirements & Business Processes – We have completed a thorough analysis of our business processes and system requirements, and the results are documented for guiding us through implementation and beyond.
- Software Integration & Testing – Our accounting software, shopping cart, terminal, and gateway are properly integrated, and we have run multiple test purchases and refunds to verify that everything functions properly and smoothly.
MLM Software will present an interesting challenge, but if you hit it with confidence and resolve (and preparation), you will succeed in launching and growing your MLM business. For more information, contact Terrel Transtrum email@example.com
The following is part 5 in our 10-part series entitled “10 Steps Towards Launch!” by Terrel Transtrum, President/Founder of ServiceQuest. If you are thinking about starting a new direct selling company, contact us today!
The fifth of ten business segments that will help you launch and run a successful MLM company is OPERATIONS. MLM operations is the vehicle that can transport the vision of a successful enterprise.
- Implement Business Systems that are Scalable
- Use Wisdom in Selecting and Planning Physical Facilities
- Plan Your Inventory Management System to align with MLM Best Practices
- Create a Reliable Daily Settlement System
- Track Orders so That you are Always Ready to Support your MLM Distributors
- Set up Essential Reports for Monitoring Key Metrics
- Implement an Operations Manual for Documenting MLM Procedures
- Integrate your Operations with Warehousing and Fulfillment
- Schedule Executive Meetings that are Designed to Drive Results
- Document the Steps in your Commission Processing System
Here are examples of descriptions that you might write for your MLM Launch Best Practice:
- Business Systems – We are implementing the vital, scalable systems to achieve predictable results with duplicatable actions, documented for training and accountability in processing enrollments, orders, payments, fulfillment, returns, commissions, and support.
- Daily Settlement System – To assure accuracy, continuity, and accountability, we have set up the daily settlement system of reporting deletions, adjustments, unposted and/or unresolved transactions, and discrepancies.
- Executive Meetings – We have set up our meeting structure for executives, managers, and teams to efficiently and effectively report and communicate, and we follow best practices for conducting effective meetings.
The steps in your Operations Plan are vital for setting a foundation of success and growth for your MLM business. For more information, contact Terrel Transtrum firstname.lastname@example.org
A detailed launch plan is accomplished in a variety of ways, whether they take the form of checklists, spreadsheets, or the more complex Gantt Charts using project management software and tools. Each action in a well-defined launch plan is a milestone. This is where your plan becomes a real plan, with specific and measurable activities, instead of just the documented strategic and business plans.
Give the launch plan as many milestones as you can think of to make it more concrete. Give each milestone a name, a person responsible, a milestone date, and a budget. Then make sure that all your people know that you will be following the plan and tracking plan – vs. – actual results. If you don’t follow up, your plan will not be implemented.
The plans we have created over the years have been designed using Microsoft® Project, a useful tool for organizing the plan. The LaunchSmart™ Launch Plan is available in Microsoft® Project file and in a standard Excel spreadsheet. Whether you use a software program, a spreadsheet, or a notebook, each element of the launch plan should be listed and explained in the related text, along with relevant details.
MLM Startup Launch Plan Checklist & Key Considerations
- Have we organized our launch plan with milestones and project timelines?
- Does the launch plan specify key dates, accountabilities, and budgets?
- Does the launch plan permit tracking planned vs. actual results?
- Does the plan adjust for contingencies and unforeseen delays?
- How will the plan be implemented and measured?
- What method and tools will we use to track the launch plan details?
- Does the startup plan include the lead times for preparing the MLM compensation plan?
- Are the hostess rewards plans and consultant incentives and compensation built into the plan?
Software selection (party plan software and MLM software) actually begins with the strategic plan and an understanding of the business model, business rules, and overall business strategies. The unique requirements of direct selling, Multilevel Marketing (MLM), and Party Plan Business, demand the careful design and organization of the strategy and model. Bear in mind that the MLM software decision (including the build / buy decision) must account for a host of special needs that your company will have to consider, regardless of the product and service mix of your marketing strategy. MLM software and Party Plan software are truly “unique animals” with unique demands.
These unique requirements include most, if not all, of the following:
- Genealogy Management
- Order Processing
- Payment Processing
- Customer Service Administration
- Contact Tracking and CRM
- Order Fulfillment
- Accounting Issues
- Product Returns
- Accounts Receivable
- Distributor Access
- Recruiting and Training
- Affiliate and Replicated Sites
- Downline Management
- Hostess Rewards and Incentives
- Awards, Incentives and Recognition
- Structured Communications
From all our years of experience, we recommend that the starting point for MLM software selection or Party Plan software development or selection is not to “shop” software vendors but to go through the rigorous exercise of defining your company’s business requirements. This can be accomplished in a variety of ways, the most efficient and thorough of which is to use a requirements document or questionnaire / outline that guides you.
Please understand that this is not an attempt to “sell” the reader on LaunchSmart™ tools, but instead to educate how the tools have come into existence and how they can help to simplify the process. Whether you use a project notebook or use a requirements list such as the LaunchSmart™ proprietary template for drafting and documenting business requirements, it is an exercise that is done over time as each area of your strategic plan begins to unfurl.
For instance, the grueling process of working through your compensation plan design creates the perfect opportunity to define the business rules and policies supporting or flowing from the compensation plan. Capture those rules and policies by carefully documenting them in a project notebook or requirements list. A good compensation plan designer will provide you with the documented elements that will help to shape your business rules in this vital area of your business.
Following is an overview of some of the key areas to consider when preparing your requirements prior to selecting your MLM software.
Maximizing Sales Effectiveness and Recruiting
If your marketing and sales plans call for maximizing sales effectiveness and recruiting through the use of technology, you will wish to include this requirement in your list. It should include requirements and tools such as helping distributors and consultants to recruit more efficiently, predictably, and profitably using the right tools and methods that work for your company. Perhaps you wish to have integrated sales opportunity analytics and embedded support for sales process best practices. The outcome is typically much more consistency in the recruiting cycles, yielding higher close rates.
Supporting Marketing Challenges and Distributor Needs
Take time to identify the requirements that enable your organization (whether you choose the MLM business model or the Party Plan company model) to increase the value of relationships by allowing distributors and consultants to interact with customers that reflect a deeper understanding of the customer’s needs and wants – their “why.” This would include personalized campaigns that synchronize across channels and provide feedback to the user.
As a start-up or as an existing company looking for the best MLM software solution you must consider the following:
- Scaleable MLM software technology
- International – language, tax, and currency
- Data Security and catastrophic recovery
- Outsourcing your mlm software infastructure to experts
- Payroll Flexibility – checks, debit cards, direct deposit
- MLM Experts vs Technology Gurus (You need both)
- Inovative Tools & systems for affiliates & distributors
- Legal MLM Software compliance (proper tracking)
Plus many other critical considerations
As an example, here are some common distributor and consultant applications for MLM software and Party Plan software, whether purchased or developed in-house. Remember that the key is determine what your business really needs, what will really set it apart, and then shop your requirements list. Don’t get caught in the trap of getting “sold” what you need without understanding how your business can be its best:
- Targeted Mailing
- Product Survey
- Integrating with email, creating professionally designed, company-approved email templates for distributors and consultants to customize
- Audio elements can be added, such as pre-recorded or personalized voice messages
- Tracking tools to monitor responses, opens, etc.
- Streaming Audio and Video
- Website Registry
- Personal Distributor Web Pages powered by the MLM Software
- Replicating web page that distributors and consultants use for simple administration and sales
- MLM Software with Online Enrollment and Ordering
- Ability to sign up new distributors and consultants from a portal site or a personal distributor website.
- Distributor, consultant, hostess or customer locator searchable by name, zip, address, etc.
- Credit card processing capabilities
- Print agreements and important forms
- Set up and administer Autoship
- Retail Shopping Cart
- Downline Management
- View activities of organization
- Generate reports relevant to growth, retention, sales volumes, etc.
- View orders and Autoship activity
- Examine genealogies and formulate growth strategies
- Push action items to individuals or groups
- Fingertip Information
- Email, broadcasts, online voicemail
- Notes and history
- Scripts for calls, emails and voicemails
- Managing Distributor’s or Consultant’s business
- Setting and tracking goals
- Reporting progress
- Calendar that integrates to company events and distributor’s own events and activities
- Address book, mailing labels, birthday tracker
- Lead Management tools
- Warm Contact List Creation and MLM Software – guided administration
- Develop and manage personal warm market list
- Set priorities and follow-up actions with dates
- Track call history, notes, contact categories
- Distributor or Consultant Tax Tracking with the MLM Software as the backbone
- Facilitate tax documentation and strategies associated with home-based business
- Provide information and references
- Party Plan Order Entry
- Entering online orders
- Managing hostess program
- Tracking past activity and future commitments
- Real-time credit card processing
By way of an additional example, and certainly not an exhaustive or comprehensive list, the realm of the company’s business operations provides another opportunity to illustrate the types of general requirements that your company should consider in the MLM software selection process. Specific requirements would be generated in the course of the business planning process.
- Distributor Management
- Order Entry
- Customer Management
- Sales Reports
- Lead Management
- Credit Card Processing
- ACH / Direct Deposit
- Check Drafts
- Inventory Management
- Autoship Templates
- Genealogy Reports
- Check Writing
- Commission Processing
- Shipping Fulfillment
- Tax Reporting – 1099 Forms
- Sales Tax Management
- Party Plan Management
- Systems Security
- Warehousing / Multiple Warehouses
The answer to this pressing question is, by its very nature, a short answer. The cost of MLM management software is in direct proportion to a company’s preparation. The better prepared a company is with the definition of business rules and software requirements, the less costly it is for the company. Programming changes are expensive, and most MLM management software companies understand that. Do not infer from this that software providers deliberately take advantage of an MLM start up or Party Plan start up company. However, use caution in that clients who fail to adequately plan and prepare and to diligently work through their requirements incur significantly greater expense, both in the short-term and in the long run.
The surest way to keep MLM management software costs under control is to write up a requirements document that represents the functions and applications that will support the company’s plan. MLM management software providers, whether they are custom programmers (in-house or out-sourced) or vendors of “off-the-shelf” offerings, understand the value in clearly defined expectations. Those expectations are established by the requirements document that both agree upon. By removing the unknowns and surprises, you greatly diminish your exposure for mounting software development or adaptation costs.